CarMax disrupted the auto sales industry rising to become the biggest hassle-free auto retailer in the nation, but does the company have a stellar reputation? It’s had its share of legal issues, and to underscore that fact, here are the 10 Biggest CarMax Lawsuits in Company History.
10. CarMax settles for workplace safety/health violation claims – $19,480
An accident occurred at the Escondido, California CarMax facility, spawning investigations into the workplace health and safety practices and provisions of the company.
Details surrounding the incident were not revealed in the online report issued by The Occupational Safety & Health Administration. OSHA investigated the case, filing a federal civil case against the company in August 2016.
Their findings revealed safety-related offenses and violations of workplace safety and health laws. OSHA handed down a penalty of $19,480 which CarMax agreed to pay.
No other information is available about the remediation or recommendations for improvements in workplace safety practices. It was however, noted, that CarMax was fined on four other occasions for similar violations with one notated as “serious” according to the OSHA website.
9. CarMax pays an environmental violation fine in 2012 – $25,500
The South Coast Air Quality Management District investigated allegations that CarMax committed environmental-related offenses at several locations in its list of California facilities. Investigations by the local agency revealed that CarMax’s practices resulted in air pollution and violated laws about the Clean Air Act.
The civil matter was handled at the state level of government and resulted in the issuance of environmental violations with a penalty of $25,500 to the company. Each CarMax location in violation was required to pay fines of $1,200 each.
The company was additionally required to provide training to avoid committing the same offenses within 45 calendar days of the written demand issued by the District.
The agency notification came on April 27, 2012. CarMax has a long history of environmental-related offenses, but this event was the least costly for the company. Multiple agencies and authorities on environmental protection and management have inspected various CarMax facilities and found numerous violations of air and water laws.
8. Carmax fined for an environmental violation – $33,500
The CarMax facility in North Attleborough, Massachusetts, got accused of committing environmental violations leading to an investigation by the Massachusetts Executive Office of Energy and Environmental Affairs agency.
The inspections began in December 2004, with a reinspection in January 2007, for compliance indicators and a field presence. The agency provided a few details about the case.
Findings compelled the MEOEEA to hand down a penalty of $33,550 for environmental violations. This incident was one of many legal issues CarMax faced throughout its history.
7. EPA fines CarMax for environmental violation – $46,501
CarMax allegedly committed environmental-related offenses in April of 2005. Investigations of allegations by the Environmental Protection Agency revealed that the Memphis, Tennessee CarMax facility allowed improperly trained and uncertified technicians to inspect and service the MVAC systems refrigerant.
CarMax failed to provide evidence of timely certification of technicians. The delay violated the EPA’s CAA laws, resulting in Stratospheric Ozone Protection Violations on multiple occasions.
In addition to paying a penalty of $46,501, the EPA ordered CarMax to install a computer software program with safeguards installed to warn service advisors that any uncertified technician will not receive payment for services rendered. The software would require technician certification information to release the payment for work orders generated.
The system would eliminate the incentive for AC repairs from uncertified providers. The software’s ability to provide a checks and balance system became necessary to prevent CarMax from hiring cheaper labor by going with uncertified providers, instead of paying the costs for certified MVAC technicians, according to the EPA.
6. CarMax pays 2005 fines for environmental violations- $119,440
The Environmental Protection Agency investigated allegations against CarMax for environment-related offenses involving claims of polluting waterways in the city of independence, Missouri.
Investigations confirmed that CarMax employees from the Independence, Mo. dealership discharged “thousands of gallons of gasoline into a creek.” The waterway sat adjacent to the facility.
Piping attached to a storage tank for petroleum used to fill up CarMax vehicles was corroded, releasing the toxic chemicals into the water. In July 2019, discharges got noticed by CarMax, which in turn, notified the EPA National Response Center. They also alerted the Missouri Department of Natural Resources and commenced the cleanup of the area.
Although CarMax acted responsibly when the issue was detected, investigations revealed that the company failed to conduct required tests on the integrity of the oil storage equipment, piping, and tanks which led to the accidental release of the toxins into the water, resulting in violations of the Clean Water Act’s federal regulations.
The Environmental Protection Agency fined CarMax $119,440 in civil penalties. The estimated cost of the cleanup is more than $1 million. The Missouri Department of Natural Resources will oversee the CarMax cleanup efforts. The civil case got settled with the agreement for CarMax to pay the fine of $119,440 in September 2020.
5. CarMax accused of discriminatory practices – $186,480
The Department of Justice announced that CarMax is one of several companies investigated for complaints of consumer protection-related offenses in the non-employment discriminatory practices category.
CarMax and the other companies in the lawsuit allegedly posted job opportunities with restrictions on citizenship status requirements. Their actions violated federal laws.
The job postings contained wording that put restrictions on the postings that excluded refugees, asylees, US nationals, and lawful permanent residents from the opportunities.
Fifteen other companies in the suit with CarMax are Axis Analytics, Walmart, and Capital One Bank, and each was required to pay civil penalties of $331,520, with CarMax paying $186,480.
The company sustained the highest fines in the group. In addition to the penalty for the violation, CarMax recruiting staff had to receive training on the Immigration and Nationality Act with attention to the anti-discrimination provision.
They’re further required to fulfill their obligations under the act to refrain from including language in campus job postings that violate current consumer protection laws.
CarMax and the other companies involved are further required to ensure that recruiting staff actions comply with federal policies of the INA anti-discrimination provisions. They settled the case in September 2022.
4. Multi-AG consumer protection violation lawsuit – $1,000,000
The State of Virginia’s Office of the Attorney General joined with 35 other states in a consumer protection lawsuit aimed against auto retailer CarMax.
Attorney Generals from 36 states filed the action alleging that CarMax failed to disclose the facts that vehicles they sold to consumers possessed safety recalls they sold without being repaired.
The company failed to inform the public about the vehicles they purchased from the company, with known safety issues with the potential to put their lives and the lives of others in danger.
They settled the case in December of 2022, with CarMax agreeing to pay $1 million in penalties. The settlement amount is to be distributed among the various members of the multi-AG class.
The state of Virginia received a share of $25,699.39, which it vowed to use for further defense against consumer protection violations. The multi-AG case sent a powerful message to auto retailers about violations of consumer protection laws.
The penalty was low compared to the potential settlements for injuries or death occurring from such actions. It’s hoped that CarMax and similar auto retailers will take these laws seriously and not repeat their past mistakes.
It’s a lesson for consumers to do their research on any used vehicle and ask the right questions before making their purchases.
3. CarMax settles with California in the multi-state lawsuit – $1.6 million
CarMax became the defendant in a civil case filed against the company in a California-based multi-jurisdiction case for allegations of environmental and consumer protection violations.
Violation Tracker confirms that District Attorney Officers from Contra Costa, San Mateo, Santa Clara, Sonoma, Solano, San Diego, Placer, Sacramento, Ventura, Kern, Stanislaus, Fresno, San Bernardino, Los Angeles, Riverside, Orange, and Alameda Counties took legal action in local civil court.
They alleged that CarMax participated in activities involving the handling and disposal of hazardous waste and materials as well as consumer information of a confidential nature, unlawfully.
The actions resulted in two types of offenses including consumer protection and environmental law violations. CarMax agreed to the $1 million fines in civil penalties and an additional $300,000 for environmental project funding and $300,000 in other costs for a total of $1.6 million in penalties and restitution.
The case was settled on June 11, 2020, in Alameda County.
2. CarMax settles for accidental injury on premises – $2,910,565
Morgan and Morgan confirm that CarMax paid a settlement for nearly $3 million to a woman who sustained lifelong injuries while walking in a CarMax parking lot.
The plaintiff and her husband took their vehicle to their local CarMax dealership to have the company inspect their manual transmission car and appraise it for a potential trade-in on another vehicle.
The couple pointed out that the remote started being installed in the vehicle after its initial purchase. They also pointed to the vehicle parked in the lot, in neutral gear with the parking brake set.
A CarMax salesman took the remote key fob and gave it to the associate who would appraise the vehicle, but neglected to mention that the fob contained a remote starter.
The appraiser completed his appraisal, leaving the vehicle parked in the front part of the dealership, but he left it in first gear. The plaintiff and her husband walked to the car.
Not knowing that the car had been left in first gear, the husband hit the remote start button. The car started and because it was still in gear, it moved forward, striking the plaintiff.
She suffered a fractured pelvis in the mishap and underwent surgery. The injury has left her with lifelong pain and discomfort. Although CarMax hired experts to testify that the remote start was defective and improperly installed in the vehicle, the attorney for the plaintiff countered that the lack of communication between the salesman and the appraiser is the reason that the accident occurred.
If the vehicle had been left in neutral instead of in first gear, it would not have struck the plaintiff. The courts determined that CarMax staff were at fault in the incident and awarded the plaintiff the sum of $2,910,565 in damages.
1. Weiss, et al vs CarMax in class action lawsuit – $6.518 million
Sales managers and Sales Consultants from CarMax’s California operations claimed that the company shortchanged them on wages, according to California’s labor laws.
A few of the employees filed a class-action lawsuit against the company to recover lost wages. CarMax denied the claims and argued that the company had paid all workers a fair and legal wage.
Instead of continuing with a legal action that would have cost the company more in legal expenses, CarMax negotiated a settlement with the Plaintiffs to resolve the case amicably.
The dates in question affected Sales Consultants and Sales Managers in the state of California who worked for the company between September 4, 2012, and July 1st of 2020.
The settlement agreement of $6.518 million compensated all participating members of the class action and closed the case with notices mailed out to all known current and former employees who worked in the included positions.
The court approved the distribution of the settlement with an enhanced payment of $2,500 among the members, according to CPT Group.